the following articles, published in various issues of the...

The following articles, published in various issues of the Maryland Independent over a number

of years, provide some insight and background into the creation and development of Swan

Point since its inception in 1969.

Maryland Independent

Thursday, December 18, 1969, Pg. 1

By Del Malkie

U.S. Steel Buys Swan Point Site

No Steel Plant, Say Spokesmen

A 950-acre tract on Swan Point on the Potomac River in Charles County has been purchased

by the United States Steel Company from Mr. and Mrs. Bennett Crain for a reported price of $1.8

million.

A U.S. Steel spokesman said late Tuesday afternoon that while the ―investment property‖

might be used for housing development, ―we know we are not going to build a steel mill there.‖

The property, which has six miles of shoreline on the Potomac and Cuckold Creek, lies about

five miles downstream from the Potomac River Bridge and about the same distance north of Cobb

Island.

With respect to citizen fears that the proximity to the new PEPCO Power Plant at Morgantown

could lead to an industrial plant at Swan Point, the spokesman said ―there is absolutely no

significance in the location at all.‖

Company representative David Ferguson pointed out that which plans for use of the point

―have not been formulated‖ the site definitely ―would not be developed for normal industrial purposes.‖

Another spokesman defined the ―normal industrial purpose‖ of U.S. Steel to manufacture steel.

The U.S. Steel officials did report they were considering development of a ―second home‖ type

of community, for retired and vacationing city dwellers.

County Commission President Reed McDonagh confirmed that the firm ―did have some

preliminary conversations‖ with him and was informed that so far as the Courthouse was concerned,

the minimum lot size which would be permitted would be in the half-acre and up category.

Both McDonagh and company spokesmen asserted that no applications had been filed for a

more dense, or commercial, use of the property nor had there been any discussions along those

lines.

U.S. Steel officials said ―no firm plans‖ would be made for use of the property until completion

of a land use study by professional consultants. Ferguson said the firm’s realty division had acquired

several similar properties in recent months around the nation, but has no similar holdings in Maryland.

He added ―U.S. Steel has a homebuilding division, but our plans are just not that far along yet.

We just might sell the land from investment point of view.‖

Other company spokesmen indicated, however, that the ―second‖ home or resort plan was

high on the list of considerations, possibly along with marinas, and other apertenances of resort living.

At the present time, the Department of Chesapeake Bay Affairs is deepening the channel into

Cuckold Creek but only to a depth of seven feet, to accommodate pleasure and oyster boats.

While present restrictions would limit development to the half-acre lot type of community,

McDonagh said U.S. Steel had been advised that a new zoning category to be known as RPC—

Residential Planned Community—was being developed and was designed for application in tracts

such as the Swan Point location. This category, however, would not include high-rise apartments,

which need separate application.

The Baltimore Sun reported Tuesday that the property at one time was under consideration as

a state park, financed through federal matching funds. The newspaper said it was unable to

ascertain ―why those reported negotiations failed.‖

Commissioner McDonagh said he had no knowledge of any such proposals.

-30-


Thursday, December 17, 1970, Pg. 1

U.S. Steel Seeks Exception To Construct Private Club

United States Steel has applied, through its Realty Development Division, for a special

exception to build a private club on land it owns on Swann (sic) Point. The club, which will be part of

a second home and retirement community, will include a golf course, clubhouse, tennis courts,

swimming pool, and a yacht basin.

The company purchased approximately 900 acres of land from Bennett Crain last year and

has announced plans to develop it into a community of approximately 5,000 part-time residents.

According to attorney Robert Barbour who is representing U.S. Steel in the matter, the

development will be for people interested in water sports primarily. He said the company felt the land,

which is in the Fifth Election District of Charles County and is over 50 miles from Washington, is too

far from D.C. for commuting and would have to be restricted to people who want second homes or to

retired people.

The preliminary plan calls for lots of approximately one-third of an acre. Company officials

said that no cost per lot has yet been decided on. The first section, which will go on sale sometime in

1971, will have 515 lots of which 100 will be on the water, and 45 on the nine-hole golf course.

The granting of the special exception is necessary to the development, Barbour said. The

construction of the club will be geared to the sale of lots and the company could not give a projected

completion date. A second nine holes for the golf course is projected also, but in a later stage of

development. Barbour said that because of the nature of the development, it will produce more tax

revenue than it will cost the county in services. Most services, such as water, sewer system and

roads will be built by U.S. Steel as part of the development of the land, according to Barbour.

Schools, he said, will not be needed in any number because of the second home nature.

The development, when finished, could have as many as 1,900 homes and 5,500 part and full-

time residents.

The club facilities will be limited to members, according to a company official, and th

membership will primarily be residents of the community.

During the one hour hearing no one voiced any objection to the plans and Samuel Bowling, a

resident of the area, said that most people in the Fifth District approved of it. He called the

development ―a natural‖ for the southern end of Charles County.

-30-


June 24, 1971, Pg. 1

At Chamber of Commerce Dinner

U.S. Steel Outlines Swan Point Plans

U.S. Steel revealed its plans for Swan Point last week.

At a dinner meeting of the Charles County Chamber of Commerce last Thursday night, Joseph

Denbeck, president of the Realty Development Division of the steel company, said the 900-acre site

would develop into a second home community that would eventually have 5,000 residents.

Because the property has about 25,000 feet of waterfront on the Potomac River and Cuckold

Creek, the development will be oriented toward water sports although tennis courts, and a golf course

will be built. A marina and clubhouse will also be constructed.

The property was purchased in late 1969 from Bennett Crain. The company retained the firm

of Wilbur Smith Associates of Washington as planners and engineers.

Neil R. Greene and Associates of Silber (sic) Spring is the architect and Shannon and Luchs of

Washington is the realtor.

The company plans to develop the property over a five year period. The first state will consist

of 330 acres which will have 515 lots. All will be single family, detached homes. There will be 88

acres set aside for recreational use including the marina, swimming pool, tennis courts, playground

and golf course.

The golf course will be built as soon as 150 people have applied for membership, Denbeck

said. There will be both resident and non-resident membership.

Denbeck said that all natural features will be preserved and residential lots will be about one-

third of an acre in size. The buyer will construct the homes, he said, but plans must be approved by

the company’s architect and builders will come from an approved list.

Lots will sell from $6,500 for a back lot to $20,000 for a prime waterfront lot. Sales will begin in

the fall, he said.

Denbeck said that because of its distance from the Washington and Baltimore metropolitan

areas, most of the houses will be second homes that will be used on weekends during the summer.

(The article included a diagram of the master plan, showing residential lot layout, initial 9-hole golf

course, community center, and the areas reserved for future residential development).

-30-


Wednesday, February 19, 1975, Pg. 1

Swan Point housing faces deadlock

Representatives of U.S. Steel Corp made a desperate plea to the Charles County

Commissioners yesterday to iron out conflicts with the Sanitary District which have stymied a housing

development at Swan Point.

The conflict between U.S. Steel and the county sanitary district originated in October, 1972,

when the county commissioners incorporated the Swan Point property as a part of the county-wide

sanitary district.

The result was that plat sales by U.S. Steel Realty Development (URD) were terminated,

because no agreement could be made with the sanitary district concerning sewer and water facilities

for the subdivision. Now 254 lot owners have no guarantees that water and sewer facilities will be

built.

The 950-acre parcel was purchased by URD in December, 1969, and approval for the phase 1

subdivision plats (284 lots) were made in May, 1972, prior to the incorporation of the development

into the sanitary district.

In the meantime, on Jan. 5, 1972, URD and the Charles County Commissioners agreed on the

sewer and water facilities at the development.

Basically, the county said that URD could build the treatment facilities, and subsequently,

could recover 100 per cent of the construction costs.

Also in the agreement, it was stipulated that Maryland Environmental Services (MES) would

participate as a contract agent for URD to operate the treatment facilities.

According to G.P. Willard, vice president of engineering and development for URD, the

conflicts have arisen due to a ―paradoxical stance‖ taken by the sanitary district.

He remarked, ―The sanitary district is saying that the agreement between URD and the county

commissioners is valid, and they will abide by them, but only if the agreement does not include their

district, which in this case, it does.‖

Reed McDonagh, deputy director of the MES, added, ―It’s a true dilemma for the sanitary

district, because they feel they can’t make an exception to bend with the agreement when it is

contrary to their regulations.‖

The 1969 comprehensive plan for Charles County makes a general statement of policy that a

public utility cannot be privately owned, which contrasts with the agreement between URD and the

former county commissioners.

Willard said that because the sanitary district will not approve plats on the property site, the

entire housing project is jeopardized, and 254 property owners who have already purchased lots are

infuriated.

The sales program was terminated in November, 1973, because the remaining plats were not

legally sanctioned by the sanitary district.

―Despite our agreement for 100 per cent recovery of construction costs,‖ Willard told the

commissioners, ―URD would be willing to recover 75 per cent if the sanitary commission provides the

vehicle whereby we can recover 75 per cent.

―But up to now, the sanitary district has not provided us with the means to recover our capital

investment in the plant construction.‖

J.R. Dembeck, president of URD, submitted a request to the commissioners to exclude Swan

Point from the jurisdiction of the sanitary commission, thereby enabling URD to proceed in

accordance with the existing agreements.

Secondly, he urged the commissioners to support a request for a franchise for the utility

system be provided by the existing agreement.

Such a franchise, he said, would provide the mechanics for collection of use fees only since

the MES will operate the facilities by contract.

Finally, Dembeck requested that the commissioners agree to a water system operation by the

MES comparable to the sewer system at the Swan Point development.

Willard concluded, ―If this situation is impossible, we would like to face up to it now and say the

project was wrong. The worst thing that could happen to us is to get a temporary breath of life, only

to find that the project would fall through later on.‖

Commissioner President Raymond Tilghman said the commissioners would attempt to arrive

at a solution as soon as possible, but he added that he doubted if they could come to any decision by

the requested date of Feb. 28, 1975, when URD officials meet with the Swan Point Property Owners’

Association.

-30-


Wednesday, May 14, 1975, Pg. 1

Swan Point to be scrubbed?

The indications are that U.S. Steel Realty Development (URD) will abandon its 950-acre Swan

Point development in the Fifth Election District.

Tuesday morning, U.S. Steel officials met with the Charles County Sanitary Commission in an

attempt to settle the impasse which has stymied the development since 1972.

At the end of the meeting, however, Joe Dembeck, president of URD, dismally announced that

URD, a subsidiary of U.S. Steel Corp., had no alternative but ―to raise the white flag‖ and scrub the

project.

The conflict began in October, 1972, when the county commissioners incorporated the Swan

Point property as part of the newly-formed, county-wide sanitary district.

Plat sales were terminated, because no agreement could be reached with the sanitary district

concerning reimbursement of water and sewer facilities for the subdivision.

At that point, 254 lot owners had no guarantees that sewer and water facilities would be built.

URD originally bought the Swan Point parcel in December, 1969, well before it was incorporated into

the sanitary district.

Before the formation of the sanitary district, the county commissioners had indicated that URD

could recover 100 per cent of the construction costs on the water and sewer facilities.

During the past two-and-a-half years, the conflict has centered on whether or not the sanitary

district would guarantee a 100 per cent recovery.

At the heated meeting Tuesday, Louis H. Cummings, chairman of the commission, noted, ―We

like you guys, we want you here, because your development concept is sound, but we can’t give you

the wealth out of our bank. Any other solution will be just an out-pouring of other people’s money –

the taxpayers of Charles County.‖

URD officials have said in the past they would be willing to recover 75 per cent of the

construction costs if the sanitary district provides the vehicle to recover the 75 per cent.

But it is the contention of URD that the sanitary district has not provided that means, and under

the commission’s terms, the amount they could recover ―would be only 10 per cent.‖

But Cummings adamantly insisted, ―If you all can work out the economics, the project can go

on. We’re giving you the opportunity to recall your money up to 75 per cent over a 10-year period,

and if that is unsatisfactory, you’ll just have to increase the costs of your lots.

―I don’t understand your reluctance to increase your lot prices by $500 to cover the costs of the

water system. You’ll never know if you can until you try it will you?‖

This move would eradicate the county policy in the 1969 comprehensive plan that a public

utility cannot be privately owned, and according to URD officials, it would honor the legal agreement

with the county on Jan. 5, 1972 that URD could make a 100 per cent recovery on the facilities.

Cummings was quick to point out that the district had sent a letter to URD on Oct.15, 1974

outlining its position and ―legally opening its hearts‖ to the developers in an effort to get the project

underway.‖

―Personally, ― he added, ―I thought it was quite an insult that our letter was not answered. I’ve

been in government for a long time, and I’ve never before seen a large corporation such as U.S. Steel

ignore an agency such as the sanitary district.‖

The second alternative that URD wanted was for the county to sell bonds for the water and

sewer project, but only to URD.

The front footage from the lots at Swan Point would pay off the bond issues and go directly to

URD. According to the sanitary district, such a move would be unethical and would raise certain legal

questions.

-30-



Swan Point agreement sought

Negotiations are currently underway between U.S. Steel Realty officials and the Charles

County Sanitary Commission which could make or break the ill-fated Swan Point development in the

Fifth Election District.

After the sanitary commission stubbornly refused to yield last week to the requests by Joe

Dembeck, President of U.S. Steel Realty Development (URD), it appeared that the project would

have to be abandoned after a two-year dispute.

But yesterday, Dembeck presented the commission with a proposal involving URD, the

commission and the county commissioners which could iron out the difficulties regarding the yet

unconstructed central sewer and water facilities at Swan Point.

Basically, URD officials have criticized the commission for not providing them the means to

recover the construction costs of the sewer and water facilities.

The commission has stipulated, according to its standard agreement with any developer, that

URD can absorb the costs only through tap-in fees for water and sewer lines.

Those fees amount to $300, which URD officials claim will not even recover the costs of

hooking up the water and sewer lines, much less construction costs for the plants.

URD has been striving for the plant to become a private utility, which is contrary to the local

laws which stipulate that a public, private utility is not allowed in the county-wide sanitary district.

The last tenure of the county commissioners had given URD permission to operate as a

private utility and to recover 100 per cent of the construction costs. Shortly thereafter, the Swan Point

property was incorporated into the sanitary district and became subject to its regulations.

The proposal offered by Dembeck yesterday says that URD will enter into the standard

agreement desired by the sanitary commission, and if it is signed by the commission and the county

commissioners, the project will begin immediately.

The proposal further reads, ―It is understood that U.S. Steel will submit to an appropriate legal

forum the existing agreements with the Charles County Commissioners and Maryland Environmental

Service for a determination of its rights under the agreements. In the event that it is judicially

determined that the existing agreements are valid and binding obligations, the standard form of

agreement will thereupon be void and have no effect, and the parties will be bound by the existing

agreements.‖

However, if the courts rule in favor of the district, U.S. Steel will honor the standard agreement,

but only under the following assurances from the sanitary commission and the county commissioners:

That any plats which are presently pending and awaiting approval will be approved promptly so

as to enable U.S. Steel to record those plats and to commence sales of lots.

That any future plats filed by U.S. Steel will be given prompt consideration.

That the sanitary commission will cooperate and not unreasonably delay the installation and

certification for operation of the sewer and water systems as already designed for Swan Point,

so as to permit its operation as soon as possible.

At the meeting yesterday, Dembeck assured the commission that URD would not walk away

from the sewer and water plants in the future and create a financial burden upon the taxpayers of

Charles County.

-30-



U.S. Steel plans suit to save Swan Point

U.S. Steel officials revealed before the Charles County Commissioners that they are going to

take civil action against the Sanitary Commission to save the Swan Point development.

The meeting last week was the latest in a series in which Joe Dembeck, President of U.S.

Steel Realty Development, has unsuccessfully attempted to begin the housing project.

Currently, there are 250 disgruntled lot owners who have been waiting for two years for the

controversial issue between USS and the commission to be resolved.

The central issue hinges around the amount of money and the method by which USS can

recoup construction costs for the planned water and sewer facilities.

It is the contention of USS that the sanitary commission will not provide the means of fairly

recovering the construction costs.

The commission has stipulated, in accordance with its standard agreement, that USS can

absorb the costs only through the tap-in fees for water and sewer lines.

Those fees amount to $300 per lot and USS officials claim $300 will not recover the costs of

hooking up the water and sewer lines, much less construction costs for the plants.

USS desires that the plants be classified as a public, private facility operated by the Maryland

Environmental Service (MES), and construction costs will be recovered by rates established by the

sanitary district.

But the drawback in the USS request is that the local laws do not permit a private utility in the

county-wide jurisdiction of the sanitary district.

Presumably, this will be a key issue in the impending court battle, if it comes to that, because

prior to the legal incorporation of Swan Point into the sanitary district, the former county

commissioners had given USS permission to recover 100 per cent of the construction costs.

Last week, in an attempt to resolve the issue before meeting with the 250 property owners,

Dembeck informed the county commissioners that the sanitary commission had rejected the latest

proposal of USS.

That proposal had outlined that USS would enter into the standard agreement desired by the

sanitary commission, and if it had been signed by the commission and the county commissioners, the

project would have begun immediately.

In the meantime, the issues would be decided in the courts, and both parties would honor the

rendered judgment.

Apparently, the sanitary commission rejected the proposal fearing a judgment in favor of USS

and hoping that USS would come to terms without a confrontation in court.

At the meeting last week, Louis Cummings, chairman of the sanitary commission, added a

spark of hope by saying, ―I’m intrigued personally by the possibilities of USS having a contract directly

with the sanitary commission to operate the facilities and to keep it under our jurisdiction.

―I don’t know how the other sanitary commissioners feel, but this would remove MES and other

indirect agencies from the project. The problem is how legally and satisfactorily USS would recoup its

investment. Under this arrangement, this would be a franchise with the sanitary commission the

operating contractor.‖

The state Public Utilities Commission would have to be questioned, he added, as to what type

of return USS could expect on the investment.

He further suggested that the sanitary commission could establish a cut-off time for the return

of the investment, perhaps 75 per cent, within a 10 or 20 year time frame.

Dembeck added an optimistic note that this proposal by Cummings would be advantageous,

because it would eliminate the third party – MES.

Additionally, he indicated that USS would be more agreeable to a return on their investment

under a 20-year period to recoup its investment.

Joe Brewer, administrator for the sanitary district, observed that the proposal would be good

from the standpoint of the sanitary district running the water and sewer facilities at Swan Point.

Dembeck declared, ―The Swan Point property owners have said that if they can’t build by this

summer, they want out, and at the meeting tonight we’ll have to tell them that the sanitary

commission has turned down our latest proposal. We will have to tell them that we will have to

pursue the matter in the courts if we run out of gas on all prior agreements.

―Secondly, if they want their money refunded, they can have it back. We can’t in good

conscience ask them to stay on any longer. We feel that with the former agreements, we have some

status.‖

Commissioner President Raymond Tilghman said that the only thing he could see regarding

the matter is ―for both parties to take this issue back to the drawing boards.‖

Cummings noted, ―It’s intriguing to me, but it could be that my proposal does not conform to

state standards. On this point, we will have to be reassured by our attorney.‖

Dembeck added, ―Let’s be brutally honest about this. We really haven’t left home plate yet.‖

And Cummings countered, ―This is the first new thing I’ve learned here today – that USS is

going to sue us regardless of what we do.‖

-30-


Wednesday, July 9, 1975, Pg. 1

New Swan Point group intervenes in dispute

The Charles County Sanitary Commission reached another impasse Tuesday concerning the

construction of water and sewer facilities at the 950-acre Swan Point development.

However, Commission Chairman Louis H. Cummings was confronted by representatives of the

Swan Point Advisory Board (SPAB) rather than Joe Dembeck, president of U.S. Steel Reality

Development.

In the past, Dembeck and Cummings have been unable to resolve the issues concerning the

construction and remuneration of the water and sewer facilities.

At a meeting earlier this spring, Dembeck noted formally that because the resolvement of

differences has continued unabated for several years, U.S. Steel would have to resort to court action

against the Sanitary District.

In an attempt to reconcile the problem, the 260 lot owners of Swan Point, at a meeting on May

21, elected Clifford A. Falkenau and Lucian Warren as chairman and vice chairman of the SPAB.

Before the meeting Tuesday, Falkenau explained, ―We arranged this talk with the sanitary

commission in order to learn their point of view I this matter. We know U.S. Steel’s position, and

perhaps we can help in reaching a suitable agreement between the two parties.‖

Warren told Cummings and Commissioners Frank Bowling and Samuel Linton that the

impasse stems from the lack of an adjudicator who can resolve the legal and economic problems.

He stressed that the SPAB doesn’t want to see the matter go to the courts, a process which

would involve much time and money.

―It’s frustrating to an advisory board,‖ he continued, ―to see that the conflicting parties never

seem to reach an agreement. We would suggest that the American Arbitration Association, with its

self-appointed lawyers, enter this matter to try to reach an agreement.‖

Cummings said the commission would take the suggestion under advisement and added that

Dembeck had orally proposed recently to begin afresh new negotiations.

―Mr. Dembeck promised me the proposal in writing,‖ he remarked. ―We’re not trying to be

loggerheads, we’re just waiting for the letter he indicated he would send us.

―We want a safe, conservative, viable course of action taken in this matter to insure that the

citizens of Charles County are protected.‖

Falkenau and Warren asked Raymond Tilghman, Charles County Commissioner President, his

position regarding the Swan Point development.

He replied that Dembeck had promised the commissioners some sort of proposal which would

be reviewed by the sanitary commission’s attorney and then forwarded to the county commissioners.

Tilghman optimistically commented he hopes a settlement will be realized after the proposal is

reviewed. He explained that the commissioners have no jurisdiction over the sanitary commission.

Cummings reiterated the sanitary commission’s position. ―U.S. Steel has told us many times

that they want a vehicle to amortize 100 per cent this investment in the water and sewer facilities. But

we don’t have that vehicle, and that’s where we stand.

―We’re open minded about this situation, but we don’t have the money and the situation all

boils down to economics. We would appreciate it if you would relate back to the property owners our

equal concern about this matter.‖

Falkenau concluded, ―We’ll be working as a third party to see if we can help resolve these

problems. We stand ready to work with both parties to see what can be done to the mutual

satisfaction of everyone.‖

-30-


Wednesday, March 3, 1976, Pg. 1

U.S. Steel sues county

U.S. Steel Corp. of Pittsburgh, owners of the ill-fated Swan Point development, has filed a %5

million equity suit against the Charles County Sanitary District, the County Commissioners and the

Maryland Environmental Services (MES).

Submitted to the Charles County Circuit Court Friday, the bill of complaint alleges that U.S.

Steel was not permitted to develop the 900-acre, residential-recreational project according to original

agreements.

Citing cancellations in excess of $1 million for lot purchases, plus incurred damages in excess

of $5 million, U.S. Steel claims it has suffered ―irreparable damage‖ at the Swan Point project.

Furthermore, the corporation alleges that it was the inaction of the respondents to approve the

water and sewer plans, subdivision plats and other agreements which resulted in the collapse of a

four-year effort to develop Swan Point.

County officials were not surprised with the equity suit, however, because U.S. Steel officials

had given prior warnings that they would take the issue to court if an agreement was not reached.

Commissioner President Ray Tilghman, Sanitary Commission Chairman Lou Cummings and

Sanitary Commission Attorney Edward Digges declined to comment on the impending court battle,

but U.S. Steel contends the following chain of events leading up to the bill of complaint:

On Jan. 5, 1972, U.S. Steel made an agreement with the county commissioners to construct,

operate, finance and maintain sewage treatment and water supply facilities for Swan Point.

An agreement modification was made on March 20, 1972 with the commissioners in which

U.S. Steel would permit MES to construct the sewage facilities and outfall line. U.S. Steel was to

construct the sewage collection lines, the water plant and water distribution lines.

The agreements dictated that U.S. Steel and the Swan Point Water Co. were to pay for the

total cost of the sewage and water systems and grant the right to recover the costs through approved

user rate schedules and assessments.

U.S. Steel had 284 lots on about 136 acres approved and recorded in the Land Records of

Charles County in May, 1972. By July, Steel initiated a sales program and sold 261 lots and

proceeded with construction of initial roadways and recreational amenities including a clubhouse,

tennis courts and a golf putting green.

At the time of the agreements, Swan Point was not included in a sanitary district and therefore

did not fall within the jurisdiction of the Charles County Sanitary District, but rather under jurisdiction

of the county commissioners.

But in October, 1972, Swan Point was incorporated into a sanitary district and under its

jurisdiction, according to actions brought about by the county commissioners. Subsequently, the

former agreements were assigned to the district.

U.S. Steel contends that the district has declined to approve the water and sewer systems for

two final subdivision plats which has prevented the further sale of lots.

The Sanitary district, U.S. Steel believes, has insisted that no approval will be made unless

new agreements are made which do not recognize the former agreements.

In the meantime, MWS said it would still construct the sewage treatment facilities and would

additionally agree to operate the treatment plant and to build and operate the water plant. U.S. Steel

would still be obligated to pay for the construction costs. But MES added that it could not carry out its

agreements without appropriate support from the county commissioners and the district.

U.S. Steel maintains that the commissioners have acknowledged their obligations under the

agreements to the extent of providing written permission for water and sewer franchises. Otherwise,

the commissioners have said that their obligations have been assigned to the sanitary district.

The district has asserted in public hearings that it is not bound by the former agreements, and

it is unable to comply with the agreements regarding payment for the system, Steel contends.

On Jan. 15, 1976, U.S. Steel wrote the district requesting that it provide the necessary

franchises for the water and sewer systems.

Cummings responded to the letter, ―For the first time the commission has now received a reply

to its letter of Oct. 15, 1974, in which you are now requesting the commission to honor the

agreements existing covering your property known as Swan Point…would you please outline, as

requested, the various steps necessary for implementation of the agreement assigned to this

commission by the county commissioners.‖

Joseph R. Dembeck, President of U.S. Steel, replied, saying that the district must notify MES

its approval of the exercise for the water and sewer franchises. He added that ―these provisions are

outlined in specific detail in our existing agreements that have been reviewed with you a number of

times.‖

Cummings replied on Jan. 27 that the district must have an analyzation detailing the existing

agreement to determine what to do next.

He added, ―We would also expect executed agreement incorporating your consistent

assurances that U.S. Steel Corp. would indemnify Charles County Sanitary Commission and the

county commissioners on behalf of the citizens of Charles County that they will never be obligated for

future operational for financial responsibility for Swan Point.‖

This is in line with Cummings’ statements last year that the District did not want to burden

Charles County taxpayers with operating costs.

In the bill of complaint, U.S. Steel is requesting that it be permitted to proceed with the Swan

Point development, that the water and sewer systems be approved and that U.S. Steel be awarded

damages in the amount of $5 million, plus interest and the costs of the suit.

-30-


Wednesday, March 31, 1976, Pg. 1

County asks dismissal of $5 million suit

A preliminary motion raising objection to the $5 million Swan Point equity suit of U.S. Steel

Corp. was filed last week by the Charles County Commissioners.

The commissioners have taken the same action as the sanitary commission, claiming that the

suit should be dismissed due to the doctrine of sovereign or governmental immunity.

In early March, the internationally-known Pittsburgh conglomerate filed the suit against the

commissioners, sanitary commission and the Maryland Environmental Service (MES).

U.S. Steel charged the three parties with failure to honor original agreements permitting the

development of the 900 acre parcel off route 257 into a residential/recreational facility.

Citing cancellations in excess of $1 million for lot purchases, plus incurred damages in excess

of $5 million, U.S. Steel claims that its real estate division has suffered ―irreparable damage‖ at Swan

Point.

Ranked as the 14th largest U.S. company in terms of sales or revenues, U.S. Steel further

alleges it was the inaction of the respondents to approve water and sewer plans which resulted in the

collapse of a four-year effort to develop Swan Point.

It is expected that Circuit Court Judge George Bowling will decide the ―preliminary objection‖

motion this Friday.

County Attorney Thomas C. Hayden, Jr. responded to the U.S. Steel suit by contending,

―Charles County is a body politic clothed with governmental immunity. The doctrine of sovereign

immunity precludes a litigant from asserting an otherwise meritorious cause of action against the sate

or one of its agencies which has inherited its sovereign attributes…‖

While he conceded that the state has the right to waive sovereign immunity, he pointed out

that ―there is no specific and/or implied legislative authority waiving the immunity vested in this

defendant.‖

Although Commissioner President Raymond Tilghman declined to comment on the possible

outcome of the case, he admitted he personally felt all along that the issues would have to be decided

in court.

Swan Point’s controversy, he said, was created by one of the most radical changes in the

sewer concept of the area.

This resulted in the current dispute of what U.S. Steel is required to do at Swan Point and

when it can comply in order to meet the governing standards, he said.

―The man in the black robe is going to have to make the ultimate decision,‖ Tilghman asserted,

―and it’s a shame it has to boil down to this.

―U.S. Steel is looking at how much it is costing them, and the sanitary commission is looking to the

overall good of the county taxpayers. The county commissioners are looking at it basically from an

ecological standpoint.

―But we are also considering the matter as far as long-term cost factors with the citizens of

Charles County. Can we acquire the plant and operate it under the guidelines set down in 1969, or

are these guidelines obsolete according to the state’s present standards?‖

In addition to steel manufacturing, U.S> Steel is involved in fabricating and engineering,

chemical production, transportation subsidiaries, cement production, real estate and other

enterprises.

For 1975, the firm’s sales and revenues amounted to $8.4 billion dollars with a total income of

$559 million.

-30-


Wednesday, April 7, 1976, Pg. 1

U.S. Steel drops suit but could re-file

U.S. Steel Corp. of Pittsburgh has filed a motion to dismiss its $5 million equity suit against the

Charles County Commissioners, Sanitary District and Maryland Environmental Service.

All three parties were jointly named in the suit filed in early March by U.S. Steel for failure to

honor original agreements permitting the development of the 900-acre Swan Point

residential/recreational community off route 257.

Motion for dismissal was unexpectedly filed last week by the Pittsburgh conglomerate just

several days after the county commissioners had filed a preliminary motion for dismissal of the suit.

Reasons for the dismissal were basically the same as those filed earlier by the District claiming

the doctrine of sovereign immunity.

County Attorney Thomas C. Hayden, Jr. contended, ―Charles County is a body politic clothed

with governmental immunity. The doctrine of sovereign immunity precludes a litigant from asserting

as an otherwise meritorious cause of action against the state or one of its agencies which has

inherited its sovereign attributes…‖

Hayden said Tuesday that the motion to dismiss presently absolves the county and other

parties without prejudice.

But he cautiously added, ―I’m not interpreting what they’ve done as putting their tails between

their legs and going home. I’ve heard that they intend to re-file the case in federal court. At this

point, I’m not sure whether or not the refilling would bear similar arguments.‖

La Plata attorney Robert I. Barbour, who is the local attorney in behalf of U.S. Steel, revealed

that the other lawyers working for the Pittsburgh firm expect to re-file the case in federal court.

He added that officially, the parties named in the suit have an opportunity to object to the

motion for dismissal. Shortly, the Circuit Court Judge will handle the final disposition of the motion for

dismissal.

Presently, U.S. Steel appears to be assuming a guarded stance as to why the dismissal was

made, and Hayden declined to speculate on the motivations.

John Weinhold, Project Manager for the Swan Point development, declined comment, and J.R.

Dembeck, President of U.S. Steel Realty Development, could not be reached.

Charges were placed against the county because of U.S. Steel’s allegations that over $1

million in lot purchases were cancelled, plus incurred damages in excess of $5 million and

―irreparable damages‖ to its real estate division.

-30-



U.S. Steel re-files $5 million suit

A $5 million equity suit against the Charles County Commissioners, the Maryland

Environmental Service and the Sanitary District has been refilled by U.S. Steel Corp. of Pittsburgh,

Pa.

According to Thomas Hayden, Jr., County attorney, a U.S. Marshal served the suit last

Wednesday – an action expected by all three parties named in the case.

The suit was originally lodged Feb. 22, but in early April, U.S. Steel filed a motion in the

Charles County Circuit Court to dismiss the charges.

Consideration of the suit will be held in the federal District Court in Baltimore, but at this point,

Hayden said a definite trial date has not been scheduled.

He added that the suit is virtually the same as the charges filed in the circuit court, but he

declined to speculate on the probable outcome.

U.S. Steel alleges it was not permitted to develop the 900-acre residential-recreational Swan

Point project off route 257 resulting in the collapse of a four-year development effort.

Citing cancellations in excess of $5 million, U.S. Steel claims it has suffered ―irreparable

damages‖ at Swan Point.

Additionally, the corporation alleges that it was the inaction of the respondents to approve the

water and sewer plans, subdivision plats and other agreements which resulted in the breakdown of

the project.

The Pittsburgh corporation, one of the 10 largest in the United States, is seeking $5 million in

damages plus interest and costs of the impending court battle.

In answer to the previous suit filed locally, the commissioners responded that Charles County

is a body politic clothed with governmental immunity.

Furthermore, the claimed that the doctrine of sovereign immunity precludes a litigant from

asserting a cause of action against the state or one of its agencies which has inherited its sovereign

attributes.

Hayden remarked that the suit is the first one in his experience which blames specific

performance in a contract and also requests damages.

Since he assumed the position of county attorney in 1967, he concluded, the equity suit is the

largest filed against the county.

-30-


Wednesday, August 24, 1977, Pg. A-5

(Some text missing due to poor microfilm reproduction)

Swann (sic) Point may be on again

The on again off again Swann Point argument, which has been ensnared…concerning water

and sewer…for over 6 years, may soon be...life.

According to Charles County Commissioner, president Raymond T. Tilghman, the county’s

legal department is considering completion of a series of…negotiations with U.S. Steel Realty

Development to iron out an agreement on who will build, own, and operate the water and sewer

services…development.

…delays of the development,...are attempting to settle, led to a $5 million suit being filed by the

developer against the county last year.

―It’s a very serious matter,‖ Tilghman said, ―but I think we’re working it out. I would expect that

some announcement will be made within the next 30 days.‖

Since Tilghman believes the impasse leading to the suit can be settled out of court, it appears

the ―announcement‖ should involve an agreement between the two on sewer and water facilities for

the proposed development.

The conflict between U.S. Steel and the county started with a decision in Oct. 1972 to

incorporate the Swann Point development as part of a county-wide sanitary district.

The result was that plat sales by U.S. Steel Realty Development were terminated because no

agreement with the sanitary district could be made concerning who would pay for and operate the

services.

In 1975, the commissioners agreed to look into the matter themselves. Tilghman said at that

time the board would attempt to find a solution to the problem as soon as possible, but that he

doubted if they could come to a decision by the requested date.

While that decision took almost a year and a half of legal negotiations to formulate, it appears

an announcement is imminent.

-30-


Wednesday, September 21, 1977, Pg. A-1

By John Parker

Swan Pt.’s 1,500—homes taken out of retirement

U.S. Steel drops $5 million suit

―We’ve taken the first step in a long journey,‖ is how public works director, Murray Levy,

described a recent agreement between U.S. Steel and the county that will revitalize plans for the

second home retirement oriented Swan Point Development in southern Charles County.

The agreement, which culminates almost 11 months of arduous negotiations and negates a $5

million suit filed by U.S. Steel last year, allows for the developer to build the water and sewer system

for the multimillion dollar housing development and dedicate it to the county.

It also requires the county to reimburse U.S. Steel up to 75 per cent of the construction costs

for the system through tap fees.

―It won’t cost the county any money, ―Levy said. ―In fact, we could make some money from the

agreement.‖

According to Levy, if tap fees, which are charged homeowners when joining a sewer an water

system, exceed the 75 per cent reimbursement, the county will receive the additional monies.

Reaching an agreement on who would own and operate the water and sewer system has

stalled the recreation oriented development for over four years.

Last year U.S. Steel took legal action against the county because of the delays, charging that

the county had broken a contract requiring it to accept the water and sewer system for Swan Point.

With the final county acceptance in late August and state approval last week, U.S. Steel is now

ready to begin construction of the development.

According to John L. Weinhold, U.S. Steel project manager-residential, because of the long

delays his company will have to review the original concept of development which called for a total of

1,500 lots.

The company will, however, go ahead with Phase I, Section I, as originally planned, he said.

Phase I will involve the construction of the water and sewer system and development of 284 lots.

Many of those lots were sold in 1973 before the water and sewer impasse occurred. The owners of

those lots, Weinhold said, ―haven’t been able to do anything with their property‖ pending the outcome

of the negotiations between U.S. Steel and the county.

Swan Point is envisioned as a retirement and recreation community by its developers.

The original plans, ―which may change,‖ Weinhold said, called for an 18-hole golf course and

clubhouse, swimming pools, tennis courts, and a marina.

Development of Phase I, according to Weinhold, will begin ―as soon as possible.

―We’re interested in getting it started quickly,‖ he added.

-30-


Wednesday, October 12, 1977, Pg. A-1

By John Parker

Unique contracts may violate county rules

U.S. Steel to receive $1.5 million rebate

Charles County apparently violated its own Department of Public Works legislations in two

recent water and sewer agreements for southern county housing developments.

The agreements are in apparent violation of DPW rules because for the first time in Charles

County a developer has been offered a 75 per cent reimbursement of the costs of constructing ―off-

site‖ water and sewer facilities, an informed source said.

―If either of these agreements were…contested,‖ the source added, ―I think they would be

declared null and void.‖

The agreements in question were signed in August with U.S. Steel: Swan Point and Suburban

Development: Cliffton-on-the-Potomac. The Swan Point agreement resolved a $5 million lawsuit by

U.S. Steel against the county.

It is estimated that the reimbursement offered U.S. Steel could cost the county $1.5 million in

connection fees which would normally go to the county, but will be returned in full to the developer

under the guidelines of the agreement.

That estimate is based on a projected cost of $2 million to build the water and sewer facilities

at Swan Point. Additional connection fee revenues will be lost because of the Cliffton Agreement.

When asked about the validity of the agreements. Murray Levy, director of public works,

strongly denied the county had broken any rules to obtain the contracts with either Steel or Suburban.

According to Levy, the water and sewer facilities that will be built by both developers and then

dedicated to the county constitute ―off-site‖ construction, for which they are entitled to the 75 per cent

reimbursement under current regulations.

―I admit it is something that might be up to interpretation,‖ Levy added, however.

The interpretation the county made, according to Levy, was that the facilities at both

developments will bring water and sewer service to the surrounding areas. And in the county’s

opinion, if facilities are built which help the surrounding area as well as the developer, it’s off-site

construction, Levy said.

But two documents conflict with that interpretation.

In 1974, a study was made by the Charles County Sanitary District, the forerunner of DPW,

which showed tat hooking the southern portion of the county into a central system at Swan Point was

―economically unfeasible.‖

In addition, the fourth paragraph of the Swan Point agreement conflicts with Levy’s

explanation.

―Whereas,‖ the document states, ―the county and Steel mutually agree that the facilities are to

be designed to serve only Swan Point…‖A similar clause is included in the Cliffton agreement.

―The whole on-site, off-site idea was to reimburse a developer for work he did off his own

property which brought water and sewer service to other homes off his property,‖ the source said. ―In

both cases here the developers are being paid for work on their own property for homes they plan to

sell.‖

One potential outgrowth of the two unique agreements is the possibility other developers in the

county, who have not been offered the reimbursement, may approach the county for similar

agreements.

The county has dismissed the idea as nonsense, but one developer who was contacted by the

Maryland Independent expressed interest in studying the agreements, and if after studying the

agreements it appears to give the two developers an unfair advantage over other developers, he said

he would push for a similar agreement.

―I asked for a similar agreement before but I ran up against a brick wall,‖ he added.

According to Raymond T. Tilghman, president of the county commissioners, who feels the

county would have lost its suit against Steel and thus supports its resolution through the water and

sewer agreement, other developers will not have a precedent with which to approach the county for

similar agreements.

The agreements with Suburban and Steel were unique, he said, because negotiations began

in 1969 before the creation of the countywide Sanitary District or the DPW.

The agreements reached in August, according to Tilghman, ―were compromises‖ to earlier

promises made to both developers, which could not be fulfilled by the county.

―We tried to patch the agreement as closely as we could with the existing regulations and the

best interests of the county,‖ Tilghman said. ―Maybe they’re not 100 per cent.‖

John L. Weinhold, of U.S. Steel, declined to comment when asked about the possible violation

of DPW regulations, saying he was ―not familiar with the issue.‖

Weinhold did say that since the document was prepared by the county he believes ―it meets all

county requirements.‖

-30-


November 9, 1977, Pg. A-2

By Dick Myers

Charles County said to be a good place for resort hotel

Charles County would be a good location for a resort hotel and conference center. That was

the conclusion of a federally funded market analysis commissioned by the Charles County

Development Commission.

The study looked at Swan Point, Cliffton-on-the-Potomac and Chapel Point and concluded that

either Swan Point or Chapel Point would be suitable but recommend Swan Point first because of the

potential time it would take to develop Chapel Point.

The study is being supplemented with an engineering report by Lorenzi, Dodds and Gunnill.

The preliminary engineering report indicates both Swan Point and Chapel Point sites are suitable for

resort hotels.

According to E.D. C. Director Betsy Cooksey, such a hotel could mean 150 jobs and $5 million

investment.

Cooksey said although the study shows the Swan Point site owned by U.S. Steel is the best of

the three, she will act as an advocate of the Chapel Point site as well as Swan Point.

The report expressed concern about the 806 (?) acre Chapel Point site because it is owned by

the state and is proposed ultimately for a state park. The report said, ―the approval of this type of

private development or public recreation lands would be a departure from past policies but appears to

be the direction the state is moving forward. It thus would take three to five years to get such a

project started,‖ the report concluded.

Cooksey said the governor, at the request of the E.D.C., formed a committee over a year ago

to study the feasibility of such a leased venture on state land, but the committee has yet to make its

report.

She likes the Chapel Point site because of its historic and scenic qualities.

The study was an idea of former E.D.C. Director William Ange (?) to use Chapel Point for a

hotel. A committee of the E.D.C. decided to add Swan Point and Cliffton-on-the-Potomac to provide

several options for the study.

Cooksey said U.S. Steel representatives have been contacted and have expressed interest in

the idea.

Cooksey said she views her role as ―taking the study to potential investors.‖ Whichever site is

chosen first will be the winner,― she said.

The report also recommends such a facility provide space as headquarters for a local cultural

center.

The report will be submitted to the county E.D.C. as well as the federal funding agency for final

approval.

-30-


Wednesday, March 8, 1978, Pg. A-9

By Dick Myers

Spray irrigation proposed at Swann (sic) Point

A spray irrigation sewage treatment system has been proposed for the Swann Point

development.

U.S. Steel, developers of the much-delayed second home and retirement community, has

submitted a proposal to the Maryland Department of Health and Mental Hygiene for use of the

proposed golf course as a site to spray treated sewage. The health department is now reviewing

whether the land is suitable for spray irrigation.

The spray irrigation idea is a change from the original development concept of conventional

sewage treatment and a point of discharge into the Potomac River. Such a sewage outfall is included

in the Charles County Water and Sewer Plan, but there is a stipulation attached that the system be

operated by the Maryland Environmental Service, a state agency.

The out of court settlement of a $5 million lawsuit last summer, with the signing of an

agreement between the county and U.S. Steel removed MES from the picture, and provides county

ownership and operation after the system is constructed. The agreement called for a rebate to the

developer of up to 75 percent of the construction cost of the system from tap fees for hooking to the

water and sewer system.

The 900-acre site on the Potomac River off Route 257 near Mount Victoria was originally

planned for 1,500 homes. According to John Weinhold, U.S. Steel residential project manager, the

company is evaluating how to proceed after development of the first phase, which contains 284

already platted single family lots.

The first section cannot begin until a decision is reached on the spray irrigation system, and a

final agreement between the county and U.S. Steel on bonding. According to Public Works director,

Murray Levy, the county is requesting a $1.75 million bond to cover roads, water and sewer and

sediment control for up to 400 lots in sections One, Two-A and Two-B.

Both Levy and Commissioner President Raymond Tilghman said they would have no problem

with a spray irrigation system if it were approved by state health and met all county standards.

Tilghman said spray irrigation represents changes in thinking and technology in the sewage treatment

field since the original plan for Swann Point was presented by U.S. Steel in 1969.

―Surface application (of sewage) is much more popular today than would be an outfall into the

Potomac,‖ Weinhold said. U.S. Steel is ready to proceed with te first section, he said, as soon as all

permits are received.

-30-


Tuesday, November 21, 1978, Pg. A-11

Swan Pt. sewage disposal considered

The Charles County Commissioners have applied to the state for a $600,000 gallon per day

discharge of treated sewage into a tidal creek off Swan Point for the proposed U.S. Steel

development. Commissioner President Raymond Tilghman said the request is an alternative to the

spray irrigation system espoused by the county and the developer. The state has tentatively rejected

that plan. Tilghman said the county still is in hopes of reversing that decision. He feels the state

requirements for spray irrigation effluent are too strict.

-30-


Wednesday, December 26, 1979, Pg. A-1

By Merle K. Turner

Swan Point OKed

A decade after purchasing more than 900 acres for a development at Swan Point, United

States Steel has been granted a permit to discharge treated sewage effluent into Cuckold’s Creek.

The permit was granted last week by the Maryland Water Resources Administration (WRA). It

allows sewage treatment capacity of 600,000 gallons per day.

The permit will extend until October 1984, and dictates what type of effluent discharge will be

allowed. Based upon the specifications, the appropriate sewage treatment plant will be designed.

After state health department officials have reviewed the plans, construction on the plant will begin,

followed by construction of roads, and eventually of houses.

Permits are given for set time periods to allow the state leverage in ―protecting themselves

against changes,‖ according to Murray Levy, head of the Charles County Department of Public

Works. The developer or DPW, which will eventually maintain the sewage treatment operation, may

be periodically required to upgrade the system when applying for renewal of permits, if requirements

change.

U.S. Steel purchased the tract of land in December, 1969, and began planning and

engineering the subdivision in Charles County’s fifth election district the next year. The

developement is seen as a retirement, or second-home community, with no school sites or

commercial sites set aside, according to Levy.

The approval of Phase l, Section l, with 284 lots came in May 1972, from Charles County’s

Planning Commission, and sale of lots in the development began in July of that year. Sales were

terminated 16 months later, when the inventory of lots was sold out, and because of ―an inability to

resolve utility impasse‖ with Charles County’s Sanitary District, according to a statement from U.S.

Steel.

The developer subsequently sued Charles County government and the Sanitary District,

seeking damages in the amount of $5 million, which it alleged the delays were costing. Land

purchasers had been offered refunds, according to the suit, because the impasse in sewage

treatment and discharge had prevented them from building on their lots.

Permission to discharge effluent rested with WRA, which held hearings this fall on the potential

for pollution. Cuckold’s Creek is a protected area for shellfish harvesting.

-30-


Wednesday, February 6, 1980, Pg. A-3

By Merle K. Turner

Newburg subdivision to get road improvement

Long confused and deteriorating road conditions in the Matthews Subdivision off Swan Point

Road last week became slightly clearer with the visit of residents and landowners to the Charles

County Commissioners.

Questions of a right of way to Swan Point Road and responsibility for road maintenance were

discussed at length, with a unique solution to road improvement proposed.

A majority of owners of the 22 lots in the subdivision gave the county commissioners their

permission to proceed with condemnation to secure a 50-foot right-of-way to connect their street with

Swan Point Road. The cost of purchasing that right-of-way would be added to the cost of improving

their gravel road to county standards, Murray Levy, public works director, said. Property owners

would pay for the improvement through higher assessments, he explained.

County land records indicate subdivision land owners are guaranteed access to their

neighborhood along a 20-foot right-of-way connect to the county road with the future county road in

the subdivision. The right-of-way dates back to the mid-1950s, when Frances B. and Mary N.

Matthews purchased the land which they later developed.

Most of the homeowners in the subdivision purchased homes from the Matthews, through the

early 1970s. In 1976, developer Joseph Mona purchased nine remaining empty lots from Matthews’

widow.

Condition of the road remained poor, and was sometimes impassable for delivery and

emergency vehicles. Resident Mary Ellen Curry complained to Senator Jim Simpson. Shortly

thereafter, she recalled, the road was noticeably improved.

It was county crews who improved the street, said Levy. He explained it was a common

―holding action‖ because his department ―anticipated the petition (of residents, to pay for upgrading)

was going to be granted.‖ The cost of the material used in the improvement will be assessed against

the property owners along with all the rest of improvement expenses, said Levy.

Mrs. Bill Swann, another Matthews Subdivision resident, last week showed the county

commissioners a letter she had been required to produce in 1978 to secure a Veterans Administration

(VA) mortgage. The carefully worded memo was designed to assure the VA lender that the

purchasers would face no major assessment for further neighborhood improvements in the future.

―The road system in Matthews Manor Subdivision is in the process of being upgraded to

county specifications,‖ explained a memo from county highway engineer Nicholas Scarpa.

―Upgrading will consist of drainage improvement and paving with asphalt concrete. Upon completion

of projected improvements, this road system will be absorbed into the county road maintenance

system,‖ the note advised.

The memo did not mention at whose expense the road improvement was to be made. Two

officials in the department of public works department told the Maryland Independent they had often

issued such letters.

Matthews Subdivision property owners, including Mona, last week gave the county a majority

approval to pursue the unique condemnation action. Curry had noted in her letter to Senator

Simpson that Mona had built two houses in the neighborhood despite a restriction on building

because of the road problem. The restriction had been repeated by Simpson in his response. With

home sales and new construction in the community difficult or impossible under present conditions,

property owners agreed to assume the expense.

-30-

the following articles, published in various issues of the...

Documents